Eight Business Lessons to Learn from the 8 Billion Dollar Profit of Trader Joe’s Grocery Stores

If you read my former post on Trader Joe’s being named one of Fast Company’s top 50 most innovative companies of 2010, you will know why I believe they do good business and marketing so well (twice as much as Whole Foods, while staying local too).

Now I’m going to give you 8 lessons, one for every BILLION in profit the company earned last year (as reported by Fast Company), which we can apply to our own businesses.

1) Find a way to take the most boring part of your industry, and make it fun. Trader Joe’s took grocery shopping and made it an enjoyable, yet very convenient discovery process. How can you take the mundane and dress it up differently?

Naming products creatively to be fun at Trader Joe's

2) What opportunities do you have to brand every interaction with your customer? Trader Joe’s speaks the consumer’s language on all their packaging, and by hand writing their store shelf labels. They are trying to get you to feel like they’re at your level, not in a far away corporate headquarters. What language does YOUR customer speak? How, and on what, can you say things that will emit your brand to your audience? Business cards? Letterheads, t-shirts, blog posts?

Communicating brand personality through a tissue box (2)

Communicating brand personality through a tissue box (3)

Communicating brand personality through a tissue box (4)

3) How can you create an environment where every detail, including the décor, the smell, the sounds, the lighting and the mood, all contribute to what your brand portrays? Environment matters in branding, just as much as designs and logos do. Trader Joe’s set up a relaxed “I’m-on-vacation-in-Hawaii” atmosphere that feels close to home at the same time.

4) What is currently far from reach for your customer that you can make accessible by reducing your own business costs, in order to pass the savings on to the consumer? Trader Joe’s got rid of third-party brand names, and “started putting innovative, hard-to-find, great-tasting foods in the ‘Trader Joe’s’ name.” The benefit was three-fold: a) branding could be emphasized in more detail b) exclusivity, and thus novelty, was automatically turned into loyalty and c) a new group of people, lower-income households, college students and not-so-rich progressive yuppies, became consumers of organic food – a group of people that other organic grocers failed to please formerly with their ridiculously high prices.

A Canadian has to stock up on survival items when visiting Trader Joe's, cuz it'll be a while till the next time...

5) How can you gather feedback from the people in your business who interact with customers directly? How can you open the lines of communication between yourself and your employees, so that the message from the street gets heard?

Employees are always on the floor, near customers where they can learn what people want

6) How can you reduce your product offering to make life simpler for your consumer? How can you use consumer buying habits, and sales figures to make the decision to cut certain products out of your inventory, to make room for new ones that will sell more? Sometimes this is a tough decision to make for business owners – if you are emotionally attached to your products, and your customers aren’t, it is time to let go.

7) What ethical business practice can you incorporate into your product offering to make consumers feel good about buying the product? Can you become fair trade certified or donate a portion of proceeds to charity? Be creative, and don’t be afraid to flaunt your ethical qualities to your consumer.

Environmentally friendly laundry detergent

8) How can you combine things to make your product so unique, if others were to copy you, they would seem like knockoffs? You know how now Walmart and Superstore have these mini isles of trail mix with special labels on them? They are totally copying Trader Joe’s, and it shows. Sometimes in our businesses it feels like a cashew is just a cashew, and there are a million people selling and buying cashews, and you have a hard time differentiating yourself (by the way, you could replace “cashews” for “realtors” and “realty”). You don’t have to invent something new to be different. Sometimes it’s the way you put together pre-existing things that make your product unique. Trader Joe’s put chili lime seasoning together with cashews. Doesn’t that make them unique? Find a way to put things together that normally come separate in your industry, in order to create a unique product offering.

Creating a unique combination to differentiate yourself from the competition